Exhibit 5
DEBT EXCHANGE AGREEMENT
DEBT EXCHANGE AGREEMENT, dated as of January 10, 2003 (this
"Agreement"), by and between FiberNet Telecom Group, Inc., a Delaware
corporation (the "Company"), and Toronto Dominion (Texas), Inc. (the
"Purchaser").
R E C I T A L S
WHEREAS, pursuant to the Amended and Restated Credit Agreement dated
as of February 9, 2001 by and among FiberNet Operations, Inc., Devnet L.L.C.,
the Purchaser and certain other lenders, FiberNet Operations, Inc. and Devnet
L.L.C. owe $5,018,546.22 to the Purchaser (the "TD Debt");
WHEREAS, the Company has agreed that, pursuant to this Agreement, it
will issue to the Purchaser, in exchange for the TD Debt, an aggregate of
51,942,950 shares of common stock, par value $.001 per share, of the Company
(the "Shares"); and
WHEREAS, the Company and the Purchaser desire to enter into this
Agreement to set forth certain matters relating to such exchange.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
Exchange
Section 1.1. Exchange of TD Debt for Shares. Upon the following
terms and conditions, and in consideration of and in express reliance upon
such terms and conditions and the representations, warranties and covenants of
this Agreement, the Purchaser shall release the Company of all obligations
owing in respect of the TD Debt and shall surrender to the Company for
exchange all documents evidencing the TD Debt, together with all appropriate
instruments of transfer, and, in exchange therefor, the Company shall issue to
the Purchaser the Shares. The exchange described in this Section 1.1 is
referred to herein as the "Exchange".
Section 1.2. Closing. The closing (the "Closing") of the Exchange
under this Agreement shall take place at the offices of Jenkens & Xxxxxxxxx
Xxxxxx Xxxxxx LLP, The Chrysler Building, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 at 10:00 a.m., New York time (i) on or before January 10, 2003,
provided, that all of the conditions set forth in this Agreement shall have
been fulfilled or waived in accordance herewith, or (ii) at such other time
and place or on such date as the Purchaser and the Company may agree upon
(such date on which the Closing occurs, the "Closing Date"). At the Closing,
the Purchaser shall deliver or cause to be delivered to the Company the TD
Debt that the Purchaser is exchanging pursuant to the terms hereof, together
with all appropriate instruments of transfer. At the Closing, the Company
shall deliver the Shares to the Purchaser.
ARTICLE II.
Representations and Warranties
Section 2.1. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Purchaser, as of the date hereof
and the Closing Date, as follows:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power to own, lease and
operate its properties and assets and to conduct its business as it is now
being conducted. The Company is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary except for any jurisdictions (alone or in the aggregate) in which
the failure to be so qualified will not have a Material Adverse Effect. For
the purposes of this Agreement, "Material Adverse Effect" means any condition,
circumstance, or situation that would prohibit or hinder the Company from
executing this Agreement and/or performing any of its obligations hereunder or
thereunder in any material respect.
(b) Authorization; Enforcement. The Company has the requisite power
and authority to enter into and perform this Agreement and to consummate the
Exchange. The execution, delivery and performance of this Agreement by the
Company have been duly and validly authorized by all necessary corporate
action, and no further consent or authorization is required for the Company to
effect the transactions contemplated hereby. When executed and delivered by
the Company, the Agreement shall constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of,
creditor's rights and remedies or by other equitable principles of general
application.
(c) Issuance of Shares. The Shares have been duly authorized by all
necessary corporate action and, when issued in accordance with the terms
hereof upon surrender of the TD Debt in the Exchange, the Shares shall be
validly issued and outstanding, fully paid and non-assessable, free of
restrictions on transfer other than as described herein and under applicable
state and federal securities laws, and assuming the accuracy of the
Purchaser's representations and warranties set forth in Section 2.2 hereof,
such Shares will have been issued in compliance with all applicable state and
federal securities laws.
(d) No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby does not and will not (i) violate any
provision of the Company's Certificate of Incorporation or Bylaws, each as
amended to date, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note,
bond, license, lease agreement, instrument or obligation to which the Company
is a party or by which any of the Company's properties or assets are bound, or
(iii)
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result in a violation of any federal, state, local or foreign statute, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or by which any property or
asset of the Company is bound or affected, except, in all cases, other than
violations pursuant to clauses (i) or (iii) (with respect to federal and state
securities laws) above, except, for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The Company
is not required under federal, state, foreign or local law, rule or regulation
to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or
consummate the Exchange in accordance with the terms hereof (other than any
filings, consents and approvals which may be required to be made by the
Company under applicable state and federal securities laws, rules or
regulations, or the rules of the Nasdaq SmallCap Market, prior to or
subsequent to the Closing).
(e) Offering. No form of general solicitation or general advertising
(as defined in Regulation D of the Securities Act of 1933, as amended) was
used by the Company or any of its respective representatives in connection
with the offer and sale of the Shares hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or
other meeting whose attendees have been invited by any general solicitation or
general advertising. Except as set forth in any schedule attached to or made
part of either the Common Stock and Warrant Purchase Agreement dated October
30, 2002 or November 11, 2002 between the Company and the investors listed in
each respective contract, no securities of the same class as the Shares have
been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
Section 2.2. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company, as of the date hereof
and as of the Closing Date, as follows:
(a) Organization and Standing of the Purchaser. The Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.
(b) Authorization and Power. The Purchaser has the requisite power
and authority to enter into and perform this Agreement and to consummate the
Exchange. The execution, delivery and performance of this Agreement the
Purchaser and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary organizational action, and no
further consent or authorization is required for the Purchaser to effect the
transactions contemplated hereby. When executed and delivered by the
Purchaser, this Agreement shall constitute valid and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with their
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the
enforcement of, creditor's rights and remedies or by other equitable
principles of general application.
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(c) No Conflict. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby does not and will not (i) violate any
provision of the Purchaser's organizational documents, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Purchaser is a party or by which the Purchaser's
properties or assets are bound, or (iii) result in a violation of any federal,
state, local or foreign statute, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to
the Purchaser or by which any property or asset of the Purchaser is bound or
affected, except, in all cases, other than violations pursuant to clauses (i)
or (iii) (with respect to federal and state securities laws) above, except,
for such conflicts, defaults, terminations, amendments, acceleration,
cancellations and violations as would not, individually or in the aggregate,
materially and adversely affect Purchaser's ability to perform its obligations
hereunder.
(d) Acquisition for Investment. The Purchaser is acquiring the
Shares solely for its own account and not with a view to or for sale in
connection with any distribution.
(e) Assessment of Risks. The Purchaser acknowledges that it (i) has
such knowledge and experience in financial and business matters that such
Purchaser is capable of evaluating the merits and risks of such Purchaser's
investment in the Company (by virtue of its purchase of Shares hereunder),
(ii) is able to bear the financial risks associated with an investment in the
Shares and (iii) has been given full access to such records of the Company and
to the officers of the Company as it has deemed necessary or appropriate to
conduct its due diligence investigation with respect to the Shares.
(f) No General Solicitation. The Purchaser acknowledges that the
Shares were not offered to the Purchaser by means of any form of general or
public solicitation or general advertising, or publicly disseminated
advertisements or sales literature, including (i) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio or (ii) any seminar or meeting to
which the Purchaser was invited by any of the foregoing means of
communications.
(g) Accredited Investor. The Purchaser is an "accredited investor"
(as defined in Rule 501 of Regulation D under the Securities Act of 1933, as
amended).
(h) Legend. The Purchaser hereby acknowledges and agrees that the
certificates or other documents representing the Shares may contain the
following, or a substantially similar, legend, which legend shall be removed
only upon receipt by the Company of an opinion of its counsel, which opinion
shall be satisfactory to the Company, that such legend may be so removed:
THE SECURITIES REPRESENTED HEREBY (THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS
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AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR FIBERNET TELECOM GROUP, INC.
SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL
THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
(i) Certain Fees. The Purchaser has not employed any broker or
finder or incurred any liability for any brokerage, investment banking,
commission, finders', structuring or financial advisory fees or other similar
fees in connection with this Agreement or the transactions contemplated
hereby.
ARTICLE III.
Covenants of the Parties
Section 3.1. Covenants. The parties hereto hereby covenant with each
other as follows, which covenants, as applicable, are for the benefit of such
parties and their respective permitted assigns:
(a) Further Assurances. From and after the Closing Date, upon the
request of the Purchaser or the Company, the Company and the Purchaser shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement, including, without
limitation, authorizing the Company's transfer agent to issue shares of the
Company's common stock to the purchasers of the Shares sold by the Purchaser.
(b) Commercially Reasonable Efforts. Each party hereto will use
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable,
consistent with applicable law, to consummate and make effective in the most
expeditious manner practicable the transactions contemplated hereby, including
without limitation, making all required regulatory and other filings required
by applicable law as promptly as practicable after the date hereof.
ARTICLE IV.
Conditions
Section 4.1. Conditions Precedent to the Obligation of the Company
to Close. The obligation hereunder of the Company to close and effect the
Exchange at the Closing is subject to the satisfaction or waiver, at or before
the Closing of the conditions set forth below:
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(a) Accuracy of the Purchaser's Representations and Warranties. The
representations and warranties of the Purchaser shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.
(b) Performance by the Purchaser. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Purchaser at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(d) Surrender of TD Debt. The Purchaser shall have released and
surrendered to the Company all documents evidencing the TD Debt together with
all appropriate instruments of transfer.
(e) Agreement, Limited Waiver and Ninth Amendment. FiberNet
Operations, Inc. and Devnet L.L.C. shall have executed and delivered to the
Purchaser the Agreement, Limited Waiver and Ninth Amendment among FiberNet
Operations, Inc., Devnet L.L.C., and the lenders under the Company's senior
credit facility.
The conditions set forth in this Section 4.1 are for the Company's sole
benefit and may be waived only by the Company at any time in its sole
discretion.
Section 4.2. Conditions Precedent to the Obligation of the Purchaser
to Close. The obligation hereunder of the Purchaser to close and effect the
Exchange is subject to the satisfaction or waiver, at or before the Closing,
of each of the conditions set forth below:
(a) Accuracy of the Company's Representations and Warranties. Each
of the representations and warranties of the Company in this Agreement shall
be true and correct in all material respects as of the Closing Date, except
for representations and warranties that speak as of a particular date, which
shall be true and correct in all material respects as of such date.
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing.
(c) No Injunction, Statute or Rule. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
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(d) Certificates. The Company shall have delivered to the Purchaser
certificates representing the Shares (in such denominations as the Purchaser
may request) being acquired by the Purchaser at the Closing.
The conditions set forth in this Section 4.2 are for the Purchaser's sole
benefit and may be waived only by the Purchaser at any time in its sole
discretion.
ARTICLE V.
Miscellaneous
Section 5.1. Fees and Expenses. Each party hereto shall pay the fees
and expenses of its advisors, counsel, accountants and other experts, if any,
and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
Section 5.2. Entire Agreement; Amendment. This Agreement contains
the entire understanding and agreement (written or oral) of the parties hereto
with respect to the subject matter hereof and, except as specifically set
forth herein, neither the Company nor the Purchaser make any representation,
warranty, covenant or undertaking with respect to such matters, and they
supersede all prior understandings and agreements with respect to said subject
matter, all of which are merged herein. No provision of this Agreement may be
waived or amended other than by a written instrument signed by each party
hereto. Any amendment or waiver effected in accordance with this Section 5.2
shall be binding upon each such party and its permitted assigns.
Section 5.3. Notices. Any notice, demand, request, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telecopy or facsimile at the
address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business
day during normal business hours where such notice is to be received) or (b)
on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, or upon actual receipt of
such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company: FiberNet Telecom Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax No.: (000) 000-0000
with copies (which copies
shall not constitute notice
to the Company) to: Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
Chrysler Center
000 Xxxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Fax No.: (000) 000-0000
If to the Purchaser: Toronto Dominion (Texas), Inc.
c/o TD Securities (USA) Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Any party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto.
Section 5.4. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
Section 5.5. Headings. The article, section and subsection headings
in this Agreement are for convenience only and shall not constitute a part of
this Agreement for any other purpose and shall not be deemed to limit or
affect any of the provisions hereof.
Section 5.6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither party hereto may assign its rights or obligations under this Agreement
(by operation of law or otherwise) without the prior written consent of each
other party hereto, and any attempted assignment without such consent shall be
void ab initio.
Section 5.7. No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person or entity.
Section 5.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
without giving effect to the choice
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of law provisions thereof. This Agreement shall not be interpreted or
construed with any presumption against the party causing this Agreement to be
drafted.
Section 5.9. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and shall become effective when counterparts have been
signed by each party and delivered to the other parties hereto, it being
understood that all parties need not sign the same counterpart.
Section 5.10. Severability. The provisions of this Agreement are
severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision
of this Agreement and this Agreement shall be reformed and construed as if
such invalid or illegal or unenforceable provision, or part of such provision,
had never been contained herein, so that such provisions would be valid, legal
and enforceable to the maximum extent possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Debt
Exchange Agreement to be duly executed by their respective authorized officers
as of the date first above written.
FIBERNET TELECOM GROUP, INC.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: SVP-Finance and CFO
FIBERNET OPERATIONS, INC.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: SVP-Finance and CFO
DEVNET L.L.C.
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: SVP-Finance and CFO
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
